The impact of the Apprenticeship Levy on Apprenticeships and other training outcomes – April 2021

Practice area:
Client: Centre for Vocational Education Research
Published: 14 April, 2021
Keywords: quantitative analysis apprenticeship levy firm-level training matched employer-employee data

Since April 2017, UK employers with an annual pay bill above £3 million have contributed to the Apprenticeship Levy. In this paper we use a matched firm-learner dataset to explore changes in apprenticeship and other training outcomes between 2015/16 and 2018/19, a period which spans the introduction of the Apprenticeship Levy. The findings reveal that over the period, there was a substantial shift away from lower-level apprenticeship starts to higher-level starts. Moreover, this shift was greater for employers who were required to pay the Levy, with smaller reductions in lower-level apprenticeships, and greater increases in higher-level apprenticeships when compared to similar non-Levy paying employers. No substantial differences were observed for other (non-apprenticeship) training undertaken over the same period.

Emerging data available for the COVID-19 period show that the decline in apprenticeship starts was exacerbated by the COVID-19 pandemic: the total number of apprenticeship starts declined to 323,000 during the academic year 2019/20 (compared with 509,000 in academic year 2015/16 and 393,000 starts in 2018/19) and fell again in the first quarter of 2020/21. The COVID-19 pandemic also appears seems to have intensified the shift towards Higher Level apprenticeships and older apprentices.

The report can be downloaded at the link above, and the CVER’s blog post can be read here.